The Federal Government Committee on the Naira-for-Crude initiative will convene an emergency meeting today in Abuja to address mounting challenges threatening the policy, The Nation can exclusively report. The high-stakes meeting comes as tensions escalate between the Nigerian National Petroleum Company Limited (NNPCL) and the Dangote Refinery over crude oil supply shortages.

Key Issues at Stake

Crude Supply Shortages: The NNPCL's inability to meet domestic crude obligations has reached a critical point, with the company reportedly committing over 90% of future production to foreign creditors through forward-sale agreements. This has left local refiners, including the $20 billion Dangote Refinery, scrambling for feedstock.

Dangote's Dollar Ultimatum: In a dramatic move, Dangote Refinery has threatened to begin selling refined petroleum products in dollars unless the Naira-for-Crude supply is stabilized. This could trigger nationwide fuel price hikes and further pressure the naira.

OPEC Quota Dilemma: The committee must reconcile Nigeria's OPEC production quota (currently 1.5 million bpd) with growing domestic demand. While exceeding the quota could provide immediate relief, it risks diplomatic fallout with OPEC members.

Behind the Crisis

  • Pre-Sold Crude: NNPCL has mortgaged future production to secure loans, leaving just 10% of output for local refiners
  • Regulatory Clash: NUPRC's domestic crude supply obligation (DCSO) conflicts with NNPCL's debt commitments
  • Currency Pressures: The policy was designed to conserve $2-3 billion annually in FX, but implementation failures now threaten currency stability

Today's Agenda

The Edun-led committee will consider three critical options:

1. Crude Reallocation

Redirecting 100,000-150,000 bpd from export contracts to domestic refining

2. Debt Restructuring

Renegotiating terms with creditors to free up more crude for local supply

3. OPEC Waiver

Seeking special dispensation from OPEC for increased production

Stakeholder Positions

  • NNPCL: Prefers gradual policy phase-out to avoid loan defaults.
  • Dangote Group: Demands immediate 300,000 bpd supply or will dollarize sales
  • Finance Ministry: Pushing for stop-gap measures to prevent naira collapse

Implications of Failure

Industry analysts warn that collapse of the deal could:

  • Trigger 40-60% hike in petrol prices
  • Wipe out recent naira gains (currently N1,450/$)
  • Force Dangote to import crude at global prices
  • Undermine $6 billion in refinery investments

As the committee meets under emergency conditions, all eyes are on whether Africa's largest oil producer can reconcile its debt obligations with its energy security needs. The outcome will determine whether Nigeria's refining revolution survives its first major crisis.